PKGS - Packages Limited

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xResearch

Active Member
Apr 9, 2017
1,537
1
38
#2
PKGS: 1Q2017 EPS of Rs16.6; -17% YoY; (Below expectations)

Wednesday, 19 April 2017

By: Topline Securities (Private) Limited

Packages Limited (PKGS) announced 1Q2017 consolidated earnings (attributable to equity holders) of Rs 16.6/share, down 17% YoY. Contraction in earnings is mainly due to flat sales and lower gross margins during the quarter. The announced result stood below our expectations.

Net Revenues remained flat at Rs6.4bn, up 1% YoY during 1Q2017. This is attributable to increased fragmentation within the packaging industry where higher price discounts to costumers subdued growth. Cost of sales posted an increase of 7% YoY due to pressure generated from input cost hike, we believe. Gross margins contracted by 4ppt to 22% in 1Q2017.

Investment income of the company registered an increase of 13% YoY to Rs1.4bn, primarily due to higher dividend from NESTLE during the period. The company normally receives dividend income from related parties including NESTLE, Tetra-Pak and Coca Cola etc.

Profit from operations decreased by 41% YoY due to increase in operating expenses, as distribution and admin costs witnessed a surge of 9% YoY and 10% YoY, respectively.
The company recorded a lower profit of Rs37mn in 1Q2017 from its investments in associated companies and Joint Venture (JV) versus a profit of Rs237mn in 1Q2016, which restricted the bottom line. Moreover, 26% YoY surge in finance costs, backed by increased debt financing, further kept bottom-line in check.

We maintain our ‘Buy’ stance on PKGS, which is currently trading at 2017E PE of 13.2x.

We flag
  • 1) issues with operations of biomass boiler plant
  • 2) decline in investment income and
  • 3) higher than expected fuel & energy costs as key risks for PKGS.
 

xResearch

Active Member
Apr 9, 2017
1,537
1
38
#3
Packages Limited
(PKGS)

August 21st, 2017

FINANCIAL RESULT FOR THE HALF YEAR ENDED 30/06/2017
(UNCONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 3,844.147
(UNCONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 3,120.134
(UNCONSOLIDATED) EPS = 34.41
(CONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 4,121.973
(CONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 3,232.490
(CONSOLIDATED) EPS = 34.63